Nda for Technology Licensing by dkw15566


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									   Guidance as of 9/19/08

           Licensing of Foreign Persons Employed by a U.S. Person – UPDATED

           The Directorate of Defense Trade Controls (DDTC) has a long-standing policy to
authorize the employment of a foreign person by a U.S. person on a DSP-5 through an
exception to the requirement for a technical assistance agreement (TAA) in accordance with
22 CFR 124.1(a). In certain instances, DDTC required a TAA in addition to the DSP-5 to
authorize the U.S. person to transfer certain levels of technical data and defense services.
After close review, DDTC has determined this “double” licensing to be redundant.
Therefore, all requests for the licensing of a foreign person employed by a U.S. person must
be made through the use of a DSP-5 to cover all levels of requested technical data and
defense services.

          The DSP-5 authorizes the U.S. person to transfer technical data and perform
limited defense services to the employee(s) on their products. The DSP-5 authorizes the
foreign person to perform defense services on behalf of the employing U.S. person. The
foreign person employed by a U.S. person does not have to reside in the U.S. to be
considered an employee but may reside and perform the job duties outside the U.S. If the
foreign person is a full time regular employee, directly paid, insured, hired/fired and/or
promoted exclusively by the U.S. person the foreign person is “employed” by the U.S.
person. The employing U.S. person is liable to ensure the employee’s compliance with U.S.
export laws regardless of where the employee currently resides

          Use of the DSP-5 permits DDTC to identify all requests for employment,
determine technical areas in which the individual is employed, standardize application
documentation, and, to the extent possible, standardize conditions of approval. In addition,
standardization should assist industry in monitoring its foreign person employees.

           For situations involving the transfer of classified technical data, a DSP-85 must be
obtained in lieu of the DSP-5. The DSP-85 application package will require all the same
information as the DSP-5 plus an executed DSP-83 required for the transmission of
classified information.

          Requests for a foreign person employee involving the transfer of manufacturing
know-how related to a Significant Military Equipment (SME) defense article will require the
execution of a DSP-83 by the foreign person and the U.S. person.

           For export control purposes, the foreign person, once authorized by a DSP-5, is
considered and treated as an employee of the U.S. person who obtained the authorization.
As such, the foreign person employee may have contact with other entities, U.S. or foreign,
so long as the presence of the foreign person employee is identified to the other party:

         (1) If the foreign person employee will have direct interaction with another U.S.
   person, it is the employing party’s responsibility to notify the other U.S. person of the
   Guidance as of 9/19/08

   foreign person’s participation. The other U.S. person will be responsible for obtaining all
   required authorizations (e.g., tech data DSP-5) in order to transfer their technical data to
   the foreign person prior to interaction.

          (2) If the foreign person employee will have direct interaction with another foreign
   person, the foreign person employee’s country/countries of nationality must be identified
   in the TAA or MLA the employing U.S. person has with the foreign party but they do not
   have to be a signatory to the agreement.

        A DSP-5 approved for foreign person employment will be valid only for a period of
four years or until expiration of their authorized stay from Department of Homeland
Security, U.S. Citizenship and Immigration Services, whichever is shorter. If the foreign
person employee resides outside the U.S., the license will be valid for the standard validity of
a license. In instances when the authorized stay is longer than four years, or the employee’s
employment continues beyond the approved validity, the applicant must apply for a renewal
of the license.

Instructions for Completing a DSP-5 License Application

       When completing a DSP-5 license application for foreign person employment,
particular attention should be paid to satisfactory completion of Blocks 3, 10, 14, 18, 20 and
21. Failure to provide complete and sufficient information in these blocks, or to explain
adequately why the information is not available, may result in the request being Returned
Without Action. Guidance for completion of these blocks in license applications for
employment of foreign persons follows:

   Block 3. Country of Ultimate Destination. State in this block the foreign person’s
   country/countries of nationality. The country/countries should match the individual’s
   passport that was used to secure the U.S. work authorization, if required.

   Block 10. Commodity. Describe the specific details of the USML technical data that will
   be provided by the applicant to the foreign person employee.

   Block 14. Foreign End-User. State the complete address in the country that was entered
   in Block 3 where the individual maintains a residence or intends to return. If the address
   of the country in this block does not match the country identified in Block 3, an
   explanation should be provided. Also, the address should be complete; DDTC is unable
   to accept post office boxes or other general/imprecise addresses without explanation or

   Block 18. Name and Address of Foreign Intermediate Foreign Consignee. If the
   individual is a national of any country other than that stated in Block 3, identify in this
   block the country/countries and, if the individual maintains residency in the country or
   Guidance as of 9/19/08

   intends to return to that country, provide a complete address. DDTC is unable to accept
   post office boxes or other general/imprecise addresses without explanation or
   justification. If, at the time of this submission, the foreign national has not yet entered
   the United States, please so indicate.

   Block 20. Specific Purpose for Which the Material is Required, Including Specific
   Program/End Use. State in this block: “For employment of a foreign person who will
   require access to technical data related to [name of program/commodity].”

   Block 21. Name and Address of Consignor in the United States. If the foreign person
   has already entered the U.S., state in this block the complete address of the U.S.
   residence. DDTC is unable to accept post office boxes or other general/imprecise
   addresses. If, at the time of this submission, the foreign person has not yet entered the
   U.S., please so indicate in the letter of explanation.

Supporting Documentation Required for DSP-5s

   All applications for the employment of a foreign person must include the following

          1) Proposed DSP-5 license application
          2) Cover letter explaining the requirement and scope of employment
          3) Copy of the individual’s passport and work authorization Department of
             Homeland Security, U.S. Citizenship and Immigration Services, (when
             residing in the U.S.)
          4) Resume
          5) Job Description
          6) Detailed description of technical data to be released and copies of technical
             data as necessary
          7) Non-Disclosure Agreement (NDA) (see attached)
          8) Technology Control Plan (TCP) (see sample at Tab 10 to Appendix A of the
             “Guidelines for Preparing Agreements”)
          9) Executed DSP-83 for DSP-85 applications and applications involving the
             transfer of SME manufacturing know-how


Required Non-Disclosure Agreement (NDA) – Access to ITAR-Controlled Defense Articles
by Foreign Person Employees
Guidance as of 9/19/08

REQUIRED – Non-Disclosure Agreement (NDA)

Below is the NDA that is required to be signed by all foreign person employees. This
NDA is intended to address ITAR requirements only. Any intellectual property or
business arrangements required by the employing U.S. person must be the subject of a
separate NDA.

    Non-Disclosure Agreement – Access to ITAR-Controlled Defense Articles by
                          Foreign Person Employees

       I, [name of foreign person], acknowledge and understand that any technical data
related to a defense article covered by the U.S. Munitions List to which I have access per
authorization by the U.S. Department of State, Directorate of Defense Trade Controls
(DDTC) under [state relevant export license/authorization number**] and disclosed
to me in my employment by [name of U.S. person] is subject to the export controls of
the International Traffic in Arms Regulations (ITAR) (Title 22, Code of Federal
Regulations, Parts 120-130), particularly the 22 CFR 124.8 clauses.

       22 CFR 124.8(1) “This agreement shall not enter into force, and shall not be
amended or extended, without the prior written approval of the Department of State of
the U.S. Government.”
       22 CFR 124.8(2) “This agreement is subject to all United States laws and
regulations relating to exports and to all administrative acts of the U.S. Government
pursuant to such laws and regulations.”
       22 CFR 124.8(3) “The parties to this agreement agree that the obligations
contained in this agreement shall not affect the performance of any obligations created by
prior contracts or subcontracts which the parties may have individually or collectively
with the U.S. Government.”
       22 CFR 124.8(4) “No liability will be incurred by or attributed to the U.S.
Government in connection with any possible infringement or privately owned patent or
proprietary rights, either domestic or foreign, by reason of the U.S. Government’s
approval of this agreement.”
       22 CFR 124.8(5) “The technical data or defense services exported from the United
States in furtherance of this agreement and any defense article which may be produced or
manufactured from such technical data or defense service may not be transferred to a
person in a third country or to a national of a third country except as specifically
authorized in this agreement unless the prior written approval of the Department of State
has been obtained.”
       22 CFR 124.8(6) “All provisions in this agreement which refer to the United
States Government and the Department of State will remain binding on the parties after
the termination of the agreement.”
Guidance as of 9/19/08

       During my employment with [name of U.S. person], I will be considered and
treated as a U.S. person for the purposes of the ITAR. As such, I am authorized to
interact and participate in discussions with other U.S. and foreign persons, and disclose
technical data as necessary, while performing my job duties covered under DDTC [case
number]. It will be the responsibility of my employer, [name of U.S. person], to notify
other U.S. and foreign persons of my status as a foreign national employee prior to my

         I also acknowledge and understand that should I inadvertently receive technical
data or defense articles for which I have not been granted access authorization by DDTC,
or if I inadvertently export technical data or defense articles received during my
employment to an unauthorized recipient, I will report such unauthorized transfer and
acknowledge the transfer to be a violation of U.S. Government regulations.

       In furtherance of the above, I hereby certify that all defense articles, including
related technical data, to which I have access will not be used for any purpose other than
that authorized by DDTC and will not be further exported, transferred, disclosed via any
means (e.g., oral disclosure, electronic, visual access, facsimile message, telephone)
whether in its original form, modified, or incorporated in any other form, to any other
foreign person or any foreign country without the prior written approval of DDTC.

________________________                                _______________
Signature – Foreign Person (Employee)                         Date

________________________                                _______________
Signature – U.S Person (Employer)                             Date

**Please leave sufficient space to enter the DDTC case number once approval is

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